Maybe I didn't blow it?

[Vulcanized]

She also told me that while she thought I was having an affair, she lost ALL respect for me.

That sounds a little fishy to me. Sounds more like she lost respect for you b/c SHE was having A. (if that was the case)

During the convo she said to me "I always knew you wanted to f*&# her, and I lost all respect for you"

My H said similar to me. I think it's a smoke screen to cover up the A. WA accuses to distract from their A.

I also told her that I would be considering filing for divorce myself, because now that I knew of her infidelities I can walk away without questioning whether I was doing the right thing or not.

Her reply to that was - "What the f*ck!? Are you crazy!?"

Good for you. Amazing how your W accuses you of being crazy. I've gotten the same thing from my H as his behaviour got more and more erratic. The calmer I became, the crazier he became.